Syarikat T.D. Sdn Bhd v Jeks Engineering Sdn Bhd (WA-24C-13-01/2019 & WA-24C-38-03/2019)

the application by Syarikat T.D. Sdn Bhd (‘STD’) to set aside the Adjudication Decision dated 31.12.2018 by the learned Adjudicator, Dhingra Jag Mohan (‘said Decision’) wholly or partially in accordance with section 15(b) and (d) of the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’) in Originating Summons No. WA-24C-13- 01/2019 (‘OS No. 13’; Enclosure 1) (‘Setting Aside Application’); 3

STD’s application to stay the said Decision wholly or partly under section 16(1)(a) and/or (b) CIPAA; and/or for the adjudicated amount, partly or wholly, be deposited with the Director of the Asian International Arbitration Centre (‘AIAC’) in accordance with subsection 16(2) CIPAA in OS No. 13 (Enclosure 19) (‘Stay Application’);

STD’s application to amend OS No. 13 (Enclosure 30) pursuant to O. 20, r. 5(1) and/or r. 5(5) of the Rules of Court 2012 (‘RoC 2012’); and

the application by Jeks Engineering Sdn Bhd (‘Jeks’) to be given leave to enforce the said Decision under section 28 CIPAA; O. 69A, r. 5; and/or O. 92, r. 4 RoC 2012 vide OS No. WA-24C-38-03/2019 (‘OS No. 38’) (‘Enforcement Application’). [2] After hearing the above mentioned applications and upon careful consideration of all the cause papers and written submissions filed by 4 both parties as well as oral submissions by the learned counsels representing STD and Jeks, the Court –

allowed STD’s application in Enclosure 30 in OS No. 13 only in respect of the amendment to the intitulement with cost in the cause as prayed;

dismissed STD’s Setting Aside Application and Stay Application in Enclosures 1 and 19, respectively, in OS No. 13 with costs of RM12,000.00 and RM10,000.00, respectively, subject to allocator; and

allowed Jeks’s Enforcement Application in Enclosure 1 in OS No. 38 with cost of RM10,000.00, subject to allocator. [3] My full grounds for the decision are elaborated below. 5 Background facts [4] STD appointed Jeks to carry out pre-cast concrete works for the construction of –

a 2-storey warehouse on No. 9B (Lot 78673), Jalan Tiang U8/92, Seksyen U8, Perindustrian Bukit Jelutong, 40150 Shah Alam (‘CEVA Project’) by way of a Letter Award (‘LoA’) dated 12.5.2014 in the sum of RM25,940,000.00 to be completed on 1.11.2014 (‘CEVA Contract’). The contract form applicable is the Standard Form of Design and Build Contract PWD Form DB (Rev 1/2010) with amendments as agreed by the parties in the

a warehouse cum office lot on HSD 132498, PT 64, No. 4 Persiaran Perusahaan, Seksyen 23, 40300 Shah Alam (‘Warehouse Project’) by way of a LoA dated 26.8.2013 in the sum of RM57,250,000.00 to be completed on 31.3.2014 (‘Warehouse Contract’); and 6

a warehouse cum office lot on HSD 132498, PT 64, No. 4 Persiaran Perusahaan, Seksyen 23, 40300 Shah Alam (‘Office Project’) by way of a LoA dated 3.1.2014 in the sum of RM10,770,000.00 to be completed on 6.6.2014 (‘Office Contract’), collectively referred to as ‘Projects’ or ‘Contracts’. [5] STD alleged that Jeks failed to complete the works for the Projects by the contractual completion dates and therefore, Jeks owes STD liquidated damages (‘LD’) in the approximate sum of RM4,698,000.00. Jeks also purportedly provided STD with defective buildings for the Warehouse Project and Office Project. A sum of approximately RM42,121,040.22 was claimed by STD against Jeks as rectification cost. [6] STD initiated arbitration against Jeks on the Contracts for, amongst others, the above mentioned claims by way of notices dated 18.5.2018 and 27.8.2018. 7 [7] STD requested that AIAC consolidate the arbitrations and this was accordingly granted on 30.7.2018 and 9.11.2018. The arbitrations were fixed for hearing in November 2019. [8] Meanwhile Jeks served its Payment Claim on STD on 7.8.2018 for the adjudication on the CEVA Contract seeking the total sum of RM6,903,315.92 consisting of RM505,498.55 pursuant to Interim Payment Certificate No. 9; RM5,694,848.33 pursuant to Progress Claim 11; RM702,969.04 for the release of the 2nd. moiety retention sum; interest; and cost. [9] STD then submitted its Payment Response dated 21.8.2018. [10] Thereafter, on 23.8.2018, STD served its Notice of Adjudication and Notice to Register the Adjudication, both dated 23.8.2018 onto Jeks. [11] This was followed by the issuance of Jeks’s Notice of Adjudication and Notice to Register the Adjudication, both dated 30.8.2018. 8 [12] A series of correspondence was subsequently exchanged between the parties with AIAC as to who should be properly named as the claimant in the adjudication proceedings. [13] Initially, AIAC vide letter dated 25.9.2018 and e-mail dated 26.9.2018, took the position that STD should be the claimant since it submitted the Notice of Adjudication first. However, Jeks’s solicitors replied on 26.9.2018 that Jeks should be the claimant on the basis that it submitted the Payment Claim on 7.8.2018. [14] By way of AIAC’s e-mail dated 2.10.2018 to the parties, AIAC requested STD to furnish copies of the Payment Claim served by the non-paying party upon the unpaid party along with the proof of service by 4.10.2018. Additionally, AIAC informed that if it did not receive the said documents within the time limit set, Jeks, having already submitted a Payment Claim along with the proof of service on STD followed by a Notice of Adjudication, will be the party which initiated the adjudication and AIAC will proceed to register the matter. 9 [15] STD did not serve a Payment Claim on Jeks. AIAC in its letter dated 8.10.2018 thus confirmed that for purposes of registration, Jeks shall be the Claimant in the adjudication proceedings. [16] Subsequently, STD issued a letter dated 15.10.2018 addressed to the Director of AIAC and inviting him to make a decision on this matter in line with the High Court decision in Tenaga Poly Sdn Bhd v Crest Builder Sdn Bhd (Unreported, Kuala Lumpur High Court OS No. WA-24C-44-06/2016) where the parties in that case had also filed notices of adjudications and the Kuala Lumpur Regional Centre for Arbitration (as AIAC was then known) had registered the adjudication based in the earlier notice of adjudication filed by the non-paying party. [17] On 17.10.2018, Jeks responded by issuing a letter to the Director of AIAC stating that the decision taken by AIAC is clear and consistent with the applicable law; there being no conflict with the decision in 10 Tenaga Poly Sdn Bhd. and STD not having issued its Payment Claim. [18] Thereafter, an adjudicator was appointed by AIAC. The Notice of Acceptance of the Appointment to Act as the Adjudicator was issued on 19.10.2018. There was no specific reply by the Director of AIAC to STD’s letter dated 15.10.2018. [19] On 24.10.2018, STD filed an application in the Kuala Lumpur High Court vide OS No. WA-24C-233-10/2018 (‘OS No. 233’) under sections 5, 6, 7(1), 8, 21, 23 and 27(1) CIPAA and Orders 7, 28, 69A and/or O. 92, r. 4 RoC 2012 for the following Orders that – “1. A declaration that the Plaintiff’s Notice of Adjudication dated 23-08-2018 (issued pursuant to Section 8 of CIPAA 2012 and Rule 2 of the AIAC Adjudication Rules and Procedure) is valid and ought to be registered by the Asian International Arbitration Centre (“AIAC”); 11

A declaration that an adjudication has been initiated on 23-08-2018 when the Plaintiff serve the Plaintiff’s

A declaration that the Plaintiff’s Notice of Adjudication dated 23-08-2018 shall be used in the adjudication proceedings between parties and registered by AIAC;

A declaration that the Plaintiff is the Claimant in the adjudication proceeding and for the Adjudicator to set out his directions accordingly;

Costs to be paid by the Defendant to the Plaintiff; and

Such further relief and order deemed fit and proper by this Honourable Court”. [20] In the meantime, STD also made an application to the Adjudicator requesting that time for the filing of the Adjudication Claim be 12 extended until the disposal of OS No. 233. Pursuant to Directions No. 2 dated 1.11.2018, the learned Adjudicator dismissed STD’s application as the extension sought was for an indefinite time; AIAC had already decided this issue prior to the appointment of the Adjudicator; and the Adjudicator was not persuaded that the switching of the role of STD as a respondent instead of a claimant will prejudice in any manner its disputed claims or set-off, if any. [21] On 27.11.2018, Lee Swee Seng J (now JCA) allowed STD to serve a Reply to the Adjudication Reply within 5 working days from the date of the direction and such Reply shall be confined to the matters raised by Jeks in the Adjudication Reply. In effect, there is no change to the parties in the adjudication and AIAC’s decision that Jeks is the Claimant in the adjudication proceedings remains unchanged. [22] The adjudication had in fact proceeded with Jeks submitting the Adjudication Claim on 2.11.2018 and STD submitting its Adjudication Response on 19.11.2018. The Adjudication Reply was then submitted by Jeks on 27.11.2018. Pursuant to the directions of the 13 High Court, STD submitted its Reply to the Adjudication Reply dated 4.12.2018. [23] On 31.12.2018, the Adjudicator delivered the said Decision whereby STD shall pay Jeks the following:

the sum of RM4,333,220.86 being the amount due and payable to Jeks (‘Adjudicated Amount’);

the sum of RM709,478.98 as interest from the due date of payment to the date of the said Decision for the outstanding amounts forming part of the Adjudicated Amount;

the sum of RM136,289.00 towards the costs of the adjudication proceedings; and

interest at the rate of 5% per annum on any part of the Adjudicated Amount and costs which remain unpaid from the date of the said Decision until the same is fully paid. 14 [24] To date, Jeks claim that STD has failed to comply with the said Decision. [25] For the sake of clarity, the current adjudication concerns the CEVA Contract. The Warehouse Contract adjudication was withdrawn by STD vide its Notice of Withdrawal dated 8.3.2019 whilst the Adjudication Decision for the Office Contract was scheduled to be delivered by 4.2.2019 but it was not released to the parties due to non-payment of the Adjudicator’s Fee and Administrative Fee.

(A) STD’s application to amend OS No. 13 vide Enclosure 30 - The parties’ submissions [26] In paragraph 2 of STD’s Affidavit In Support (‘AIS’) affirmed by its Director, Norhani Binti Amil on 18.4.2019, STD states that the proposed amendment is necessary to –

correct a minor error in the intitulement of the OS by including a reference to Order 69A RoC 2012 in the intitulement; and 15

comply with O. 69A, r. 2(c) RoC 2012 in light of the averment in paragraph 4(i) of STD’s Supplemental Affidavit affirmed on 18.4.2019 (Enclosure 32) [that “the Adjudicator’s appointment is illegal and / or improper and / or defective and / or that it was done in contravention of sections 7, 8, 21(a), 23 and 27 of the … (“CIPAA”);”] by including an additional ground to set aside the said Decision i.e. “the Adjudicator’s appointment was illegal, defective and in contravention of sections 7, 8, 21(a), 23 and 27 of CIPAA.” and making reference to “the Supplemental Affidavit of NORHANI BINTI AMIL affirmed on 18 April 2019”. [27] STD’s counsel argued that the proposed amendments are procedural in nature and bona fide. Furthermore, the application was made without delay and will not occasion any injustice or prejudice to Jeks. The character of the suit remains unchanged and STD is the one that will be prejudiced if the amendments are not allowed. [28] Mr. Sanjay Mohan submitted for Jeks that STD’s application to amend was not made in good faith and should be dismissed as – 16

it was made at a late juncture and is an attempt to steal a march by introducing new grounds to set aside and stay the said Decision. These new grounds were mentioned only briefly in STD’s Supplemental Affidavit (Enclosure 32) and was served on Jeks on 23.4.2019, one day before the initial written submissions were due and before Enclosure 30 was ever served on Jeks. Jeks had prepared and filed its submissions on 24.4.2019 premised on STD’s earlier Affidavits, namely STD’s AIS affirmed on 24.1.2019 (Enclosures 2 – 10 and 12 – 17); Affidavit In Reply (‘AIR’) affirmed on 4.3.2019 (Enclosure 22); and Additional Affidavit affirmed on 18.4.2019 (Enclosure 29). In contrast, STD in its Written Submissions, had relied mainly on the additional new grounds to support the Setting Aside

it is tantamount to a tactical manoeuvre and an afterthought, and has caught Jeks by surprise; and 17

no reasons or explanation was given by STD by way of affidavit to explain why these additional grounds was introduced as such a late stage. The failure to provide credible explanation on the delay in filing Enclosure 30 is fatal. - Findings by the Court [29] O. 69A, r. 2(1)(c) RoC 2012 provides that: “(1) An application to which this Order applies may be made by originating summons in Form 5 which shall – …

state the grounds in support of the originating summons;”. [30] The locus classicus on the legal principles applicable to an application to amend pleadings is the case of Yamaha Motor Co. Ltd. v. Yamaha Malaysia Sdn. Bhd. & Ors. [1983] 1 M.L.J. 213 where at p 214 the Federal Court held: 18 “… The general principle is that the court will allow such amendment as will cause no injustice to the other parties. Three basic questions should be considered to determine whether injustice would or would not result, (1) whether the application is bona fide; (2) whether the prejudice caused to the other side can be compensated by costs and (3) whether the amendments would not in effect turn the suit from one character into a suit of another and inconsistent character. (See Mallal’s Supreme Court Practice, page 342). If the answers are in the affirmative, an application for amendment should be allowed at any stage of the proceedings particularly before trial, even if the effect of the amendment would be to add or substitute a new cause of action, provided the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the original statement of claim….”. 19 [31] More than three decades later, Zulkefli CJ (Malaya), in delivering the judgment of the Federal Court in the case of Hong Leong Finance Bhd v Low Thiam Hoe and another appeal [2016] 1 MLJ 301, considered the test in Yamaha Motor in light of the introduction of the pre-trial case management (‘CM’) regime and held at pp 308 – 309 as follows: “[15] We shall first deal with the question of law posed under the amendment appeal. The Court of Appeal in reversing the decision of the High Court and allowing the defendant’s application to amend his defence and counterclaim relied and applied fully the test as laid down in the case of Yamaha Motor [16] With respect, the Court of Appeal in applying the principles laid down in Yamaha Motor’s case had failed to consider that the Yamaha Motor’s case by itself was not concerned with the amendment made on the day of the trial as was done in the present case. The principles in Yamaha 20 Motor in our view were laid down in respect of an application to amend that was made at an early stage of the proceedings in particular before the trial commences. [17] In Yamaha Motor, the Federal Court amongst others considered the effect of O 20 r 5 of the Rules of the High Court 1980 (‘RHC 1980’) (now known as Rules of Court 2012 (‘RC 2012’)). The facts in Yamaha Motor showed that the application to amend the statement of claim was made about seven months after the original statement of claim was amended and the trial has not commenced. [18] It is pertinent to note that Yamaha Motor was decided under the old RHC 1980. The civil procedure has since then changed with the introduction of the pre-trial case management in the year 2000 under O 34 of the RHC 1980 (22 September 2000) and now under O 34 of the RC 2012 (1 August 2012). Nowadays the court recognises especially 21 under the new case management regime that a different approach needs to be taken to prevent delay in the progress of a case to trial and for its completion. The progress of the case is no longer left in the hands of the litigants but with the court in the driver’s seat (see the case of Syed Omar bin Syed Mohamed v Perbadanan Nasional Bhd [2013] 1 MLJ 461; [2012] 9 CLJ 557). In particular when an application to amend the pleading is made at a very late stage as was done in the present case, the principles in Yamaha Motor ought not to be the sole consideration. This is because an order for compensation by payment of costs in such a case may not be an adequate remedy and it would also disrupt the administration of justice which affects the courts, the parties and the other users of the judicial process (see the case of Conlay Construction Sdn Bhd v Perembun (M) Sdn Bhd [2014] 1 MLJ 80).” (emphasis added). 22 The paradigm shift brought about by RoC 2012 in its emphasis of proactive CM by the courts is also borne out in the decision of the High Court in Klass Corporation (M) Sdn Bhd v. MKRS Management Sdn Bhd [2016] 4 CLJ 438 and the Court of Appeal in Christopher Bandi v. Tumbung Nakis & Anor; Jamil Sindi (Third Party) [2016] 4 CLJ 831. [32] Applying the foregoing legal principles to the present application before the Court, I am of the considered opinion that the proposal to amend the intitulement to add the reference to “69A” RoC 2012 is merely procedural and made bona fide and thus, was allowed but the same cannot be said of the other proposed amendments to OS No.

[33] OS No. 13 was filed on 25.1.2019. Enclosure 30 was filed on 19.4.2019 and two CM were held before that, namely on 11.2.2019 and 28.3.2019. 23 [34] During the CM on 28.3.2019, STD’s counsel said that the parties have exhausted the Affidavits for OS No. 13. The Senior Assistant Registrar then fixed 17.5.2019 as the date of hearing for OS No. 13 and OS No. 38 and directed that written submissions for both OS to be filed by 24.4.2019. [35] The averment that the Adjudicator’s appointment is illegal and/or improper and/or defective and/or that it was done in contravention of sections 7, 8, 21(a), 23 and 27 of CIPAA was first raised in STD’s Supplemental Affidavit affirmed on 18.4.2019 (Enclosure 32). The next day, the Notice of Application as per Enclosure 30 was filed but the sealed copy was extracted only on 23.4.2019 and served on Jeks on 24.4.2019. [36] Given the deadline to file the written submissions, Jeks has filed and served its AIR No. 2 affirmed on 23.4.2019 (Enclosure 33) to STD’s Supplemental Affidavit which was received on 18.4.2019. During the filing of Enclosure 33, Jeks has no knowledge of Enclosure 30. Jeks has thus taken a position with regard to the matters set out in 24 Enclosure 32 and one of which is that there are new grounds being relied by STD. Jeks had also prepared and filed its Written Submissions for the Setting Aside Application, Stay Application and Enforcement Application dated 24.4.2019 (Enclosure 35). [37] STD contended on the authority of Cheah Theam Kheng v City Centre Sdn Bhd (in liquidation) and other appeals [2012] 1 MLJ 761 that Jeks cannot approbate and reprobate in objecting to the proposed amendments while addressing it in its AIR No. 2 (Enclosure 33). However, in its Written Submissions In Reply dated 23.8.2019 for the Setting Aside Application (Enclosure 62), STD had raised a preliminary objection on the use of Enclosure 33 and sought to expunge it from the court records for the following reasons:

the law does not allow the AIR to be used after the submissions have been filed;

the AIR was filed without leave of the Court; 25

the AIR was served on the day that parties were directed to file and exchange their written submissions i.e. on 24.4.2019;

STD had no opportunity to reply and/or address these new evidence by way of affidavit; and

STD was deprived of its last right of reply. [38] STD’s counsel cited the cases of Lum Choon Realty Sdn Bhd v Perwira Habib Bank Malaysia Bhd [2003] 4 MLJ 409; Sagujuta (Sabah) Sdn Bhd v Trane Malaysia Sales v Services Sdn Bhd [2014] 5 MLJ 535; HSBC Malaysia Bhd v Lionel Rao a/l R Simon Rao & Anor [2006] 4 MLJ 245; and Yian Sdn Bhd v Datuk Bandar Kuala Lumpur & Anor [1998] 5 MLJ 550 in support of the preliminary objection. [39] Having considered the arguments raised in relation to the preliminary objection, I gave my decision in favor of STD. Therefore, Jeks could not rely on Enclosure 33 for purposes of the Setting Aside 26 Application. In light of this, the issue of Jeks approbating and reprobating does not arise. [40] Further, taking into account the chronology of events, I am inclined to agree with Jeks’s submission that the additional ground which STD sought to introduce for the Setting Aside Application would have been available or made known to STD from the time that OS No. 13 was filed. STD’s Affidavits offered no explanation as to why this ground was raised only in Enclosure 32 and not from the date of affirmation of STD’s AIS (Enclosure 2) on 24.1.2019. To my mind, the absence of some material and cogent explanation by STD is fatal to its application to include the illegality of the Adjudicator’s appointment as another ground in the Setting Aside Application. [41] Nonetheless, I take cognizance of STD’s submission with reference to cases such as SKS Pavillion Sdn Bhd v Tasoon Injection Pile Sdn Bhd [2019] MLJ 396; TYL Land and Development Sdn Bhd v SIS Integrated Sdn Bhd and another case [2018] MLJU 217; Ritma Hebat Sdn Bhd v Kayangan Kemas Sdn Bhd and another suit [2017] MLJU 27 2034; Euroland & Development Sdn Bhd v Tack Yap Construction

(M) Sdn Bhd [2018] MLJU 861; and Wrp Asia Pacific Sdn Bhd v Ns Bluescope Lysaght Malaysia Sdn Bhd [2015] 1 LNS 1236 that jurisdictional arguments in CIPAA proceedings are arguments of law and can be raised at any point of time. Hence, if I am wrong in dismissing STD’s application to amend OS No. 13 to include the ground that the Adjudicator was improperly and/or illegally appointed, I have in any event addressed my mind to this point of contention in the Setting Aside Application which I now turn to next.

(B) STD’s application to set aside the said Decision vide OS No. 13 (Enclosure 1) - The parties’ submissions [42] It is customary for a bid to set aside an adjudication decision to be premised on the grounds as provided in section 15(b) and/or (d) CIPAA, namely that an adjudicator had somehow committed a breach of natural justice or acted in excess of his jurisdiction. This case offers a twist to the norm as one of the reasons put forth by STD in its 28 attempt to set aside the said Decision is that, not only did the learned Adjudicator committed a breach of natural justice, but so did AIAC in the appointment of the Adjudicator. The said appointment is alleged to be illegal and/or wrong in law and therefore the Adjudicator did not have jurisdiction to conduct the adjudication proceedings. [43] In particular, STD posits that –

the Adjudicator’s appointment was premised on the wrong Notice of Adjudication i.e. the one submitted by Jeks, which was accepted due to the sole reason that Jeks had submitted a Payment Claim. As the non-paying party, STD is equally entitled to initiate adjudication proceedings and AIAC had departed from its represented practice without a proper reason;

the AIAC appointed the Adjudicator prematurely based on Jeks’s request dated 12.10.2018, and in contravention of sections 21(a) and (b)(i) CIPAA. The AIAC as the sole appointing authority and/or a public body is under a general 29 duty to conduct itself in a reasonable manner and to appoint adjudicators properly; and

it was denied natural justice when the AIAC refused to appoint the same adjudicator for all three adjudications on the basis that the agreement of the parties must be obtained. This unreasonable exercise of the AIAC’s discretion has purportedly caused an unlawful restriction to the Adjudicator’s jurisdiction and a multiplicity in all three adjudication proceedings. Effectively, STD was deprived of its statutory right under section 14 CIPAA, which allows the adjudicator to consolidate the adjudication proceedings if the same adjudicator is appointed. [44] In so far as the allegation that there was a breach of natural justice by the learned Adjudicator is concerned, STD’s foundation for saying so is that the learned Adjudicator failed to afford parties an opportunity to address the issue of whether Clause 56 of the Conditions of Contract (‘CoC’) on “Deduction From Money Due To Contractor” contravenes CIPAA. The finding he made was not put forth by either party. 30 [45] STD additionally contended that the Adjudicator unlawfully restricted his jurisdiction in deciding that he had no jurisdiction to grant a declaration. In effect, this amounted to an unlawful reclusion of his power, decision and/or discretion. [46] Further, the Adjudicator allegedly acted in excess of his jurisdiction when he awarded late payment interest to Jeks, which falls outside the scope of the Payment Claim, Payment Response and CIPAA. Late payment interest is not a claim for work done and so the Adjudicator has no jurisdiction to decide on this matter. [47] Jeks countered STD’s grounds to set aside the said Decision by submitting firstly, that STD did not once take issue with the appointment of the Adjudicator during the course of the adjudication proceedings by, for example, writing to AIAC to convey that the appointment of the Adjudicator was premature. It was further argued that STD conducted itself in a way that was consistent with its 31 acceptance of the Adjudicator’s appointment and as such is estopped from contending otherwise. [48] Moreover, STD’s allegation that AIAC committed a breach of natural justice when it refused to appoint the same adjudicator for all three adjudications or to consolidate the adjudication is said not to amount to a ground justifying the setting aside of the said Decision under section 15 CIPAA. [49] Learned counsel for Jeks further submitted that there is no merit to STD’s argument that as a result of AIAC’s refusal to appoint the same adjudicator and to consolidate the adjudication proceedings, STD was deprived of its contractual right to set off as well as declaratory relief since STD had in fact raised the issue relating to Clause 56 CoC and sought for declaratory relief in its Adjudication Response. The learned Adjudicator had considered STD’s submissions and dismissed the same. 32 [50] As regards STD’s submission that the Adjudicator acted in excess of his jurisdiction by allowing Jeks’s claim for late payment interest, Mr. Sanjay Mohan argued that STD did not, in the course of adjudication proceedings, take the position that Jeks’ claim for such interest does not fall under the scope of CIPAA. STD merely alleged that Jeks’s claim for late payment interest is a double claim and no challenge was mounted as to the date of payment and the sums received by Jeks. Reference was also made to the provision in section 25(o) CIPAA. - Findings by the Court [51] Section 13 CIPAA lays down the effect of an adjudication decision in these words: “Effect of adjudication decision 13. The adjudication decision is binding unless – 33

it is set aside by the High Court on any of the grounds referred to in section 15;

the subject matter of the decision is settled by a written agreement between the parties; or

the dispute is finally decided by arbitration or the court.”. [52] STD’s Setting Aside Application is made pursuant to section 15(b) and (d) CIPAA whereby the complete provision reads: “Improperly procured adjudication decision 15. An aggrieved party may apply to the High Court to set aside and adjudication decision on one or more of the following grounds:

the adjudication decision was improperly procured through fraud or bribery;

there has been a denial of natural justice;

the adjudicator has not acted independently or impartially; or 34

the adjudicator has acted in excess of his jurisdiction.”.

Whether there is a breach of natural justice by AIAC [53] Dato’ Emran Arifin submitted that paragraph (b) of section 15 CIPAA does not expressly state who must have denied natural justice to the aggrieved party and so it is possible for AIAC to be equally blameworthy as an adjudicator in this regard. With respect, learned counsel has clearly read paragraph (b) in isolation of the words that appear in the heading and the chapeau of the provision. The heading for section 15 CIPAA is “Improperly procured adjudication decision” whilst the chapeau allows an application to be made by an aggrieved party to the High Court to set aside an adjudication decision on one or more of the grounds as set out in paragraphs (a),

(b), (c) or (d). 35 [54] The words “adjudication decision” is defined in section 4 CIPAA to mean “the decision made by an adjudicator under subsection 12(2)”. Section 12 on “Adjudication and decision” includes subsection (2) which states: “(2) Subject to subsection 19(5), the adjudicator shall decide the dispute and deliver the adjudication decision within –

forty-five working days from the service of the adjudication response or reply to the adjudication response, whichever is later;

forty-five working days from the expiry of the period prescribed for the service of the adjudication response if no adjudication response is received; or

such further time as agreed to by the parties.” (emphasis added). 36 [55] The provision in CIPAA to govern the consolidation of adjudication proceedings is section 14 and it reads: “If two or more adjudication proceedings in respect of the same subject matter are being adjudicated before the same adjudicator, the adjudicator may, with the consent of all the parties to the adjudication proceedings, consolidate and adjudicate the matters in the same proceedings.” (emphasis added). [56] Generally, a consolidation can be carried out where: (a) one adjudicator has been appointed in two or more adjudication proceedings; (b) the adjudication proceedings are still pending; (c) the disputes in these adjudications relate to the same subject matter; and (d) all parties to the different adjudications consent to the consolidation: see Construction Adjudication In Malaysia by Lam Wai Loon and Ivan FY Loo, Second Edition, Sweet & Maxwell 2018 at paragraph [12.001] at pp 319 - 320 and paragraph [22.052] at p 532. 37 [57] In contrast, Rule 10 of the AIAC Arbitration Rules on “Consolidation of Proceedings and Concurrent Hearings” states that: “1. Upon the request of any Party or, if the Director deems it appropriate, the Director may consolidate two or more arbitrations into one arbitration, if:

the parties have agreed to consolidation;

all claims in the arbitrations are made under the same arbitration agreement; or

the claims are made under more than one arbitration agreement, the dispute arises in connection with the same legal relationships, and the Director deems the arbitration agreements to be compatible.” (emphasis added). Rule 10(2) goes on to provide that the Director of AIAC shall consult all parties and any appointed arbitrators when deciding whether to consolidate. A non-exhaustive list of the relevant circumstances 38 which the Director of AIAC shall take into account is also expressly stated in the same sub Rule. [58] It is also relevant to mention the provision in Regulation 2 in the Construction Industry Payment and Adjudication Regulations 2014 [P.U.(A) 103/2014] as follows: “2. Responsibility of KLRCA The KLRCA is responsible, in accordance with the policy directions from the Minister charged with the responsibility for legal affairs –

for maintaining a register of the KLRCA’s Panel of Adjudicators;

for determining the code of conduct for an adjudicator; 39

for providing training and conducting examinations for an adjudicator;

for determining fees for the services and expenses of an adjudicator;

for receiving and holding any fees and expenses deposited by the parties in dispute on behalf of an adjudicator.”. [59] By virtue of subsection 3(1) of the Arbitration (Amendment) Act 2018 [Act A1563], “All references to the Kuala Lumpur Regional Centre for Arbitration in any written law or in any instrument, deed, title, document, bond, agreement or working arrangement subsisting immediately before the coming into operation of this Act shall, when this Act comes into operation, be construed as a reference to the Asian International Arbitration Centre (Malaysia).”. 40 [60] In addition, the Director’s Message in AIAC’s publication on CIPAA and the 2014 Regulations and Orders, AIAC Adjudication Rules and Procedure, Circulars and Guide to CIPAA states that: “… AIAC has been named as the adjudication authority by virtue of Part V of CIPAA, which means that the centre has a key role to play in being the default appointing and administrative authority. In line with this, the AIAC has come up with the AIAC Adjudication Rules & Procedure to supplement the CIPAA and to enable us to provide administrative support for the efficient conduct of adjudication. The AIAC Adjudication Rules & Procedure will assist both adjudicators and parties in the adjudication process.”. [61] Having considered all statutory provisions and references as quoted above, AIAC’s function is undoubtedly as an administrative authority providing administrative support in adjudication proceedings, and in 41 performing this role, AIAC is governed by the express provisions of CIPAA. In this regard, it is crystal clear that there is no provision in CIPAA which provides AIAC with a discretion or power to appoint the same adjudicator in the absence of consent by both parties. The decision whether to consolidate two or more adjudication proceedings in respect of the same subject matter is one for the adjudicator to make, and not AIAC, and in making that decision, the consent of all the parties to the adjudication proceedings must be obtained (see section 14 CIPAA, Pring & St Hill Ltd v CJ Hafner t/a Southern Erectors [2002] EWHC 1775 (TCC) and PWC Corp Sdn Bhd v Ireka Engineering & Construction Sdn Bhd and another appeal [2018] MLJU 170). [62] In the same vein, any attempt by STD to draw comparisons with the arbitration proceedings that have been consolidated are misplaced. Based on Rule 10 of the AIAC Arbitration Rules as above quoted, the Director of AIAC may consolidate two or more arbitrations where no agreement for such consolidation is reached between the parties if the provision in paragraph (b) or (c) in sub Rule (1) is satisfied. 42 Section 14 CIPAA is worded differently. The procedural rules which are to apply in an adjudication proceeding or an arbitration are thus quite distinct. [63] AIAC’s alleged refusal to appoint the same adjudicator for the three adjudications or to consolidate the adjudication is clearly not a ground for setting aside of an adjudication decision (see sections 4, 5, 12 and 15 CIPAA). It is therefore my finding that there is absolutely no merit in STD’s submissions that there is a breach of natural justice by AIAC.

(ii) Naming the Claimant and the Respondent in the adjudication proceeding [64] As mentioned at the outset, STD had filed an application vide OS No.

The counsels who appeared before the learned Judge for the hearing of the said application on 27.11.2018 have differing views as to whether the Court actually heard and decided on the OS. STD’s 43 contention is that the Court did not decide on the OS whilst Jeks takes the opposite stance. [65] During the clarification session with learned counsels, I had indicated that since there are no Grounds of Decision or a fair Order in relation to the order of the Court on 27.11.2018, I am guided only by the Notes of Proceedings (‘NoP’) and the joint letter dated 29.11.2018 sent by the parties to the learned Adjudicator (exhibit “A-13” in Enclosure 3). [66] The NoP on 27.11.2018 shows that Ms. Janice Tay appeared for STD, and Mr. Sanjay Mohan and Ms. Wong Li-Wei represented Jeks. The learned Judge recorded the proceedings which took place from 4.40 p.m. until 5.23 p.m. as follows: “After hearing submissions of the parties this Court allows the P to serve a Reply to the Adj Reply within 5 working days from today and the Reply to the Adj Reply shall be confined to the matters raised by the D in the Adj Reply and that the 44 time for the Adjudicator to deliver his decision shall be 45 days from the date the Reply to the Adj Reply is served or the last day of service of the Reply to the Adj Reply. Each party bear own costs.”. [67] The words “After hearing submissions of the parties” indicate that the learned counsels must have made submissions before the learned Judge and His Lordship gave the directions after considering the OS, STD’s AIS, and the parties’ AIR and written submissions. His Lordship did not grant the declarations sought by STD and in giving the directions as he did, it appears that those directions were pursuant to prayer 6 – “such further relief and order deemed fit and proper” by the Court. With those directions, the OS was disposed. [68] Two days later, STD’s solicitors wrote a letter dated 29.11.2018 to the learned Adjudicator (‘said Letter’) stating that: “Parties write jointly to inform the Learned Adjudicator on the outcome of the hearing yesterday (27.11.2018) in Court. The 45 Learned Adjudicator had been apprised of this matter previously when the Respondent requested extension of the time for the filing of the Adjudication Claim pending resolution of this matter. The issue as to who should be Claimant was not decided by the Judge yesterday however the Learned Judge has given a direction to allow the Respondent to file and serve a Reply to the Adjudication Reply within 5 working days from the receipt of the Adjudication Reply (i.e. 4 December 2018) limited to the issues raised in the Claimant’s reply and for the Learned Adjudicator to be given a corresponding extension for the delivery of the Adjudication Decision. Given the outcome of the hearing in court, there is no change to the parties and the decision of AIAC as to which party is the Claimant remains unchanged.” (emphasis added). 46 [69] The said Letter was referred to by the learned Adjudicator in the said Decision in the following paragraphs: “35. On 29 November 2018 the Respondent informed the Adjudicator that on 27 November 2018 the High Court Judge had given directions that STD (the Respondent) is given the right to reply to the Adjudication Reply by 4 December 2018, limited to the issues raises in the Claimant’s Adjudication Reply. Therefore the Adjudicator is given corresponding extension of time for the delivery of the Adjudication Decision.

On 4 December 2018 the Respondent served the Reply to the Adjudication Reply (“RARep”).

On 6 December 2018 the Adjudicator invited the Parties to submit the written directions of the High Court Judge, if available. The Respondent confirmed 47 that there was no written direction from the High Court, but the Parties had written the joint letter dated 29 November 2018 sent to the Adjudicator. The Claimant did not raise any issue or submit an objection to the Respondent’s said letter. Accordingly the Adjudicator allowed the service of the Reply to the Adjudication Reply.

The Parties confirmed that given the outcome of the hearing before the High Court on 27 November 2018, there is no change as to which Party is the Claimant and the decision of the AIAC remains unchanged.

The Respondent submitted that the issue of which Party is the Claimant is no longer an issue to be dealt with by the Adjudicator in this Adjudication Proceeding.” (emphasis added). 48 [70] It also bears relevance to quote the later part of the said Decision under the heading “J.1 REPLY TO THE ADJUDICATION REPLY” where the learned Adjudicator said that: “65. On 4 December 2018, the Respondent by consent between the Parties, and in accordance with the directions of the Judge during the hearing held on 27 November 2018 at Kuala Lumpur High Court, submitted the Reply to the Adjudication Reply.

The Respondent clarified that the Application for Stay of the Adjudication, was withdrawn based on the representations between the Parties, and not dismissed by the High Court. Secondly the Judge did not see the need to address the issue of which party to be the claimant. Therefore the Respondent submitted that this issue is no longer an issue to be determined in this Adjudication Proceedings and the Adjudicator does not have the jurisdiction to address this matter, 49 since the Parties did not agree to extend the jurisdiction of the adjudicator in accordance with s27(3) of the CIPAA.”. [71] Jeks submitted that during the hearing of OS No. 233, certain concessions were made by the parties as evidenced by the said Letter. Consequently, the adjudication proceedings were conducted on the basis that Jeks is the Claimant and STD is the Respondent. The issue as to who should be named the Claimant and Respondent in the adjudication proceeding was never brought up again after the said Letter. Therefore, STD must be taken to have accepted this position and ought not be allowed, through the current application, to take a contrary position. I agree. [72] In Zana Bina Sdn Bhd v Cosmic Master Development Sdn Bhd and another case [2017] MLJU 146, the Court, in addressing the issue raised by the respondent that the adjudicator’s appointment was invalid as the adjudicator failed to indicate his acceptance within 10 working days, held that – 50 “[101] I agree with learned counsel for the Claimant that the Respondent ought to be estopped from raising this issue at this late juncture now. Such objection ought to have been taken by the Respondent in the Adjudication proceeding then and certainly not now. The issue cannot now be a ground for setting aside the Adjudication Decision since it is no longer material and relevant. [102] First, the Respondent had written to the very Adjudicator for extension of time to file the Adjudication Response, whose appointment, it said was not agreed to because it could not decipher the Standard Terms and Conditions of KLRCA that was attached to the acceptance of the appointment. It must be stated here that the Adjudicator is not the one who has problem deciphering the Standard Terms and Conditions of KLRCA for the appointment of the Adjudicator. Rather it is the Respondent and so they are at liberty not to accept the said appointment because they are 51 not agreeable to whatever they said are the undecipherable terms and conditions of appointment.”. [73] In view of the factual background as set out above and the clear position taken by STD during the adjudication proceeding that the problem as to which party is the claimant was no longer a live issue, I am of the opinion that STD must surely be estopped from raising the same issue in this Court and it certainly cannot be allowed to be a ground for setting aside of the said Decision (see too, Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd v Liew Choong Kin [2018] 3

(iii) The legality of the appointment of the learned Adjudicator [74] Part III of CIPAA sets out the provisions on the appointment, duties, obligations, powers and jurisdiction of the adjudicator and it begins with the following: 52 “21. Appointment of adjudicator An adjudicator may be appointed in the following manner:

by agreement of the parties in dispute within ten working days from the service of the notice of adjudication by the claimant; or

by the Director of the KLRCA –

upon the request of either party in dispute if there is no agreement of the parties under paragraph (a); or

(ii) upon the request of the parties in dispute.”. [75] Falling back again on the uncontroverted facts, the scenario in this case is one where there was no agreement between the parties with regard to the appointment of the adjudicator i.e. falling squarely within the meaning of section 21(b)(i) CIPAA. As submitted by Mr. Sanjay Mohan, there is no express provision in CIPAA that requires the parties to exhaust opportunities to reach a mutual agreement. The time frame fixed is 10 working days from the service of a claimant’s 53 notice of adjudication. By the same token, there is no statutory basis for STD to compute the 10 working days from 8.10.2018, being the date that AIAC confirmed that Jeks will be the Claimant in the adjudication proceedings, as opposed to 30.8.2018 which is the date on which the Notice of Adjudication was served on STD. [76] In the premises, I am of the view that STD’s challenge on the legality of the appointment of the Adjudicator is totally baseless.

(iv) Whether there was a breach of natural justice by failing to allow the parties to submit on issues decided in the said Decision and withholding of jurisdiction by the learned Adjudicator to grant declaratory relief [77] STD’s submissions on these issues revolve essentially on Clause 56 CoC. For ease of reference, Clause 56 CoC in its entirety is quoted below: 54 “56.0 DEDUCTION FROM MONEY DUE TO CONTRACTOR The (Syarikat T.D.) or the P.D on its behalf shall be entitled to deduct any money owing from the Contractor (JEKS) to the (Syarikat T.D.) under this Contract from any sum which may become due or is payable to the Contractor (JEKS) under this Contract or any other contracts to which the (Syarikat T.D.) and the Contractor (JEKS) are parties thereto. The P.D. in issuing any certificates under clauses 53 and 64, shall have regard to any such sum so chargeable against the Contractor, PROVIDED THAT this provision shall not affect any other remedy to which the Government (Syarikat T.D.) may be entitled for recovery of such sums.”. [78] One of the main issues in the adjudication was expressed by the learned Adjudicator in the following paragraph in the said Decision: “40. In accordance with the submissions of the Parties in the Adjudication Claim, Adjudication Response, 55 Adjudication Reply and Reply to the Adjudication Reply, and by way of letters and documents, the Parties submitted the following main issues to be determined in this Adjudication Proceeding: I. Whether a Declaration of entitlement to Set-off be given: The Respondent is seeking a declaration that it is entitled to set-off amounts due to the Respondent from the Claimant, under other separate contracts between the Parties pursuant to Clause 56.0 of the Conditions of the Contract, against the adjudicated amount, if given in favour of the Claimant. …”. [79] The above quoted issue originates from STD’s prayer in paragraph 78(a)(iii) of the Adjudication Response (exhibit “A-14” in STD’s AIS, Enclosure 4). 56 [80] The declaratory relief sought by STD that it is entitled to set-off the adjudicated amount is therefore in respect of the Warehouse Contract and Office Contract, and not in respect of the CEVA Contract, which is the subject matter before the learned Adjudicator. [81] Further support is found under the heading of “FINDINGS AND REASONS” in the said Decision wherein it is stated, inter alia, that: “76.1 The Respondent submitted that pursuant to s25(n) of the CIPAA the Adjudicator has the power to, “decide or declare on any matter” so the Respondent seeks the declaration that the Respondent is entitled to set off the adjudicated amount and deduct monies due under any other contract. This further relying on the provisions under Clause 56.0 of the Contract.” (emphasis added). [82] The subsequent paragraphs in the said Decision relate to the submissions by Jeks and STD where the latter had apparently relied 57 on Coulson on Construction Adjudication, Second Edition by Sir Peter Coulson; Econpile (M) Sdn Bhd v IRDK Ventures Sdn Bhd & Anor [2016] 5 CLJ 882; Gan Hwa Kian & Anor v Shencourt Sdn Bhd [2007] 3 CLJ 538; SH Design v Build Pte Ltd v BD Cranetech Pte Ltd [2018] SGHC 133; View Esteem Sdn Bhd v Bina Puri Holdings Sdn Bhd [2018] 2 MLJ 22; Pembenaan Leow Tuck Chui & Sons v Dr Leela’s Medical Centre Sdn Bhd [1995] 2 MLJ 57; and subsection 12(5) CIPAA. [83] The learned Adjudicator finally comes to a conclusion that: “76.11 The Respondent’s submissions for set offs are dealt with hereafter within this Adjudication Decision, without the need for granting a declarative relief.

Having considered all the submissions and case law authorities, the declarative relief sought does not address the relevant set offs, if and 58 where applicable in context of the Underlying Contract, the Payment Claim and the Adjudication Claim. Therefore I find and hold that the Respondent’s application for declarative relief is disallowed.

78.5 The Claimant has not taken issue with the provisions under Clause 56.0 on the right of set offs, but Claimant’s submissions relying on the case of Amal Bakti v Milan Auto is that the double recovery is not permitted in law. The Respondent has chosen to commence independent adjudication proceedings on 13 September 2018 for issues and claims under each respective Contract and its rights of set off under Clause 56.0 of the contracts.

78.6 The Respondent has not provided any convincing provision under CIPAA or under the objectives of the CIPAA that authorizes an adjudicator to 59 consider matters relating to any other contract between the parties, as stipulated in Clause 56.0 of the Contract. I can accept that the Parties are free to agree on the terms of the contracts between them, however once the dispute is submitted for adjudication under CIPAA, then the provisions of CIPAA shall apply in determining the type and class of set-offs permitted under the Act. In my view the terms of a contract cannot override the provisions under CIPAA, especially when a dispute has to be adjudicated under the statutory Act like CIPAA. The Respondent has also relied on the raison d’etre of CIPAA is, “to facilitate regular and timely payment …” so if the scope of set-offs or defenses are broadened to include anything beyond the Underlying Contract, it will certainly defeat the very purpose of CIPAA. The Parties are at liberty to submit their disputes for final resolution to arbitration or courts. In the present case the Respondent has 60 already initiated arbitration proceedings for three contracts. I do not see any grounds that the Respondent’s rights of set offs under Clause 56.0 will be prejudiced if not considered in this Adjudication Proceeding.

78.7 Therefore I am not convinced that the Clause 56.0 should override the provisions of CIPAA, for considering the dispute in accordance with s5 & s6 of the CIPAA, the Payment Claim submitted by the Claimant for the single Underlying Contract, the CEVA Contract only and the Payment Response by the Respondent.

78.8 I am persuaded by the Claimant’s submission that the Adjudicator has no jurisdiction to make any determination on other contracts, and I do not accept the Respondent’s submission for set offs due under other contracts to be considered in this 61 Adjudication Proceeding. The reasons for disallowing in addition to the above is that, I accept that the Claimant’s claims in this adjudication are related to CEVA Contract. The Respondent’s set offs for LAD and defective works as related to Office Contract and the Warehouse Contract is the subject matter of other adjudications. I am not persuaded by the Respondent’s submissions that cross-contract claims and set-offs can be applied under CIPAA, especially when the adjudication proceedings under other two contracts is in progress…. …

Accordingly, after having considered the case law authorities, the submissions by the Parties, and for the reasons given in Paragraphs [78] including its Sub-Paragraphs, I decide and hold that the Respondent is not entitled to set offs whether due 62 under the other contracts, in this Adjudication Proceeding.”. [84] From the above passages, it is immediately evident that –

the issue of whether STD is entitled to set-off and a declaration to that effect originated from STD by way of its Adjudication Response and that it is in respect of the Warehouse Contract and Office Contract rather than the CEVA Contract;

extensive submissions were made by the parties on this issue;

the learned Adjudicator had given careful consideration to the adjudication pleadings and submissions as exemplified by the detailed reasoning in the said Decision; and

the main reason the learned Adjudicator dismissed STD’s set-off and its declaratory relief is because STD had commenced two other adjudication proceedings seeking for the same 63 amounts that STD sought to set-off in the present adjudication proceedings. [85] Excerpts from the said Decision is quoted in extenso to show that it debunks the submissions made by STD in this Court on the grounds as advanced by learned counsel for Jeks, namely –

it is trite law that in an application of this nature, it is not the function of the Court to look into or review the merits of the case or to decide the facts of the case. The role of the Court is to see the manner in which the learned Adjudicator conducted the hearing and whether he had accorded procedural fairness to STD: see ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another appeal [2016] MLJU 1776. I would add the following illumination in paragraph [15.027] of Construction Adjudication in Malaysia (supra at pp 380 – 381): 64 “The following guidelines laid down by Akenhead J in Cantillon Ltd v Urvasco Ltd have been adopted and applied by the Courts in Malaysia:

it must first be established that the adjudicator failed to apply the rules of natural justice;

any breach of the rules must be more than peripheral; they must be material breaches;

breaches of the rules will be material in cases where the adjudicator has failed to bring to the attention of the parties a point or issue which they ought to be given the opportunity to comment upon if it is one which is either decisive or of considerable potential importance to the outcome of the resolution of the dispute and is not peripheral or irrelevant; 65

whether the issue is decisive or of considerable potential importance or is peripheral or irrelevant obviously involves a question of degree;

it is only if the adjudicator goes off on a frolic of his own, that is deciding a case upon a factual or legal basis which has not been argued or put forward by either side, or put in further evidence without giving the parties an opportunity to comment, that the type of breach of the rules of natural justice which may warrant the setting aside of the decision;

it follows that, if either party has argued a particular point and the other party does not come back on the point, there is no breach of the rules of natural justice in relation thereto.”; and 66

the learned Adjudicator had correctly refused to allow the set-off in view of the fact that STD has commenced two separate and independent adjudication proceedings under the Warehouse Contract and Office Contract. In PWC Corp Sdn Bhd v Ireka Engineering & Construction Sdn Bhd and another appeal [2018] MLJU 170, the respondent made a cross claim against the claimant from a different construction contract, and there was a similar clause providing for set-offs from other contracts. The High Court held that the adjudicator was correct in his finding, inter alia, that issues or set-offs arising from separate and distinct construction contracts cannot be considered in light of the wordings of CIPAA. The Court of Appeal in Ireka Engineering and Construction Sdn Bhd v PWC Corp Sdn Bhd and another appeal [2019] MLJU 35 affirmed the decision of the High Court in these words: “[51] The learned judge noted that the singular is used with respect to ‘a construction contract’ under section 5(1) and ‘the construction contract’ 67 under section 5(2)(b) of the CIPAA. His Lordship opined that the CIPAA envisages a payment claim for each construction contract and not for various payment claims for multiple contracts or where the payment response served is with respect to overpayment or set off in another construction contract. We are inclined to agree with the learned judge given the operation and intent of the CIPAA.... [52] … the adjudicator and the learned judge were right to hold that it would not be appropriate for the adjudicator to decide on the set off from the KL Sentral Project when the very issue, as admitted by learned counsel for the appellant, was pending before another adjudicator in another adjudication proceedings. Further, under section 14 of the CIPAA, two or more adjudication proceedings in respect of the same subject matter which are adjudicated before the same adjudicator may be consolidated and adjudicated 68 together, but only with the parties’ consent. The present facts do not even come within the terms of that remit. Hence, it was entirely proper for the learned judge to draw and hold the said conclusions. [54] We also agreed with the learned judge that it was an abuse of the adjudication process for the appellant to raise in this adjudication the same matter raised in another adjudication. Given the circumstances, it cannot be said that the adjudicator came to a rather narrow and restrictive view of his jurisdiction resulting in him wrongfully declining jurisdiction over the set off when he held that he has no jurisdiction to determine the merit of other contracts.”. [86] Dato’ Emran Ariffin submitted that the aforesaid cases involving PWC Corp Sdn Bhd and Ireka Engineering & Construction Sdn Bhd are inapplicable because AIAC’s failure to appoint the same adjudicator 69 for the other adjudication proceedings was not raised as an issue in those cases. Moreover, the parties there never intended to consolidate the proceedings under section 14 CIPAA and the appellant there had not requested to AIAC to appoint the same adjudicator to determine the disputes. STD cited the judgments in Charles Anthony Santiago v Suruhanjaya Pilihan Raya, Malaysia & Anor [2014] 7 MLJ 271 and Abdul Ghani Che Mat v Pengerusi Suruhanjaya Pasukan Polis & Ors [2016] MLJU 1062 to boost its argument that AIAC has unreasonably exercised its discretion in the administrative role it plays under CIPPA and thereby has caused injustice to STD. [87] With due respect, I am unable to agree that the authorities referred to lends support to STD’s propositions since these are judicial review cases involving decisions by public bodies and by no stretch of the imagination can they apply in the context of the instant case, which must come within the four corners of CIPAA. In the absence of any express provision in CIPAA allowing an adjudication decision to be set aside on the ground of breach of natural justice or any other 70 indiscretions by AIAC, STD’s submissions, novel as they may be, is unfounded. [88] In the final analysis, this is not a case as what STD had attempted to portray. The learned Adjudicator did not go on a frolic of his own. Quite to the contrary, the learned Adjudicator addressed his mind to the submissions, including case law, before arriving at his reasoned decision. This makes STD’s present submissions before the Court sound very hollow indeed. [89] It is completely untenable for STD to claim that there is a failure to adhere to the principles of natural justice or a withholding of jurisdiction on the part of the Adjudicator. I have no difficulty in concluding that this is yet another case where the losing party is basically unhappy with the outcome of the adjudication proceeding. 71

Whether the learned Adjudicator acted in excess of his jurisdiction by allowing Jeks’s claim for late payment interest [90] It is STD’s contention that the learned Adjudicator had no jurisdiction to determine Jeks’s claim for late payment interest since it is not a payment claim i.e. a claim for payment for work done or services rendered under the express terms of a construction contract. Additionally, Jeks has not proven its claim by producing any substantive documents. Hence, STD takes the position that such interest should be claimed as a debt due in arbitration by Jeks against STD. [91] Jeks’s response is that the claim for late interest payment is part and parcel of Jeks’s Progress Claim No. 11 as can be seen at p 854 of STD’s AIS (Enclosure 4). The sum sought by Jeks in its Adjudication Claim and Payment Claim is exactly the same and there are no additional or new heads of claim being introduced. STD has responded to this issue in paragraph 23 of the Reply to the Adjudication Reply at p 4568 of STD’s AIS (Enclosure 15) in the Setting Aside Application by stating that: 72 “iii) In relation to late interest, Syarikat T.D. points out that JEKs is now confining its claim to Claim No. 11 and not Claim No. 9 (paragraph 21) when it made no limitations in its Adjudication Claim (paragraph 22). iv) In relation to late interest for Claim No. 9, Syarikat T.D. reiterates that this is a double claim subsumed in Claim No. 10 and reiterates that it has made payment which has not been accounted for.”. [92] Mr. Sanjay Mohan further submitted that STD had provided a “List of Payment” to Jeks during the course of the adjudication proceedings [exhibit “A-14” at p 2133 of STD’s AIS in the Setting Aside Application (Enclosure 8)] and STD did not challenge the dates of payment and amounts received by Jeks from STD. In any event, Jeks aver that there is no prejudice to STD as whilst the Adjudicator allowed Jeks’s claim for late payment interest (Variation No. 016 which as at 31.7.2015 stands at RM301,216.12), the total variation orders adjudicated by the Adjudicator is RM204,698.94 instead of 73 RM2,178,761.14 as claimed by Jeks (refer “Table-7: Revised Variation Order Claim Summary” in paragraph 85.18 of the said Decision). [93] The analysis by the learned Adjudicator can be seen under “ISSUE VI: FINANCING COST AND INTEREST” at paragraphs 101 – 110 of the said Decision. The material passages are shown below: “104. … The Parties have not adduced on whether the Contract provides for any rate of interest and the dates from which the interest if any, is to be accrued as a condition of the Contract. The Claimant submitted that the due date for payment is in accordance with Clause 53.5 read together with Appendix-1 of the Contract.

In accordance with s25(o) of the CIPAA, the Adjudicator has the power to award financing cost and interest. I am guided by the rates as generally prevailing in the Rules of Courts. In accordance with 74 the Chief Justice of Malaysia, Practice Direction No. 1 of 2012, the rate of interest should be 5% per annum. The Claimant has also claimed for 5% per annum…. …

Accordingly, I hold and decide that the Claimant is entitled to the interest at 5% per annum simple rate of interest, with effect from the dates for the claims shown in Table 9.0, on the Adjudicated Amount till the date of the Adjudication Decision and at the same rate of 5% p.a. from the date of the Adjudication Decision till it is fully paid. … Table 9.0: Effective Dates and Computation of Interest till Date of AD

(A) Payment Due Date

(B) Balance Unpaid –

(C) Adjudicated Amount

(D) Interest till 31.12.2018 IPC No. 9 28-Apr-2015 505,498.55 457,748.55 84,213.19 75 PPC No. 11 29-Aug-2015 5,694,848.33 3,241,224.34 541,684.07 2nd Moiety 13-May-2016 702,969.04 634,247.97 83,581.72 Total interest till Date of AD 709,478.98 [94] In Milsonland Development Sdn Bhd v Macro Resources Sdn Bhd & Ors and another suit [2018] MLJU 1912, the Court of Appeal confirmed that an adjudicator has the power to award interest: “[16] In regard to issue (iii), the learned Judge found as follows: “[56] I agree with learned counsel for the Claimant that the Adjudicator had acted well within his powers pursuant to section 25(o) CIPAA wherein the Adjudicator shall have the power to award financing costs and interest. It is more an argument of law when it comes to a claim under a construction contract as to whether a contractor should be entitled to interest for being kept out of 76 the monies due to him for work already done for which he had expanded labour, material and financing costs. In fact it is so axiomatic that it is hardly argued against.” … [24] On this issue, we found no difficulty in agreeing with the learned Judge’s view that the learned adjudicator was fully entitled to award interest. The rationale is a simple one. The power to award interest is attached to the power to award the claim in that it is a consequential power. Such principle is premised on the concept of fairness as in all monetary claim, the winning party had been wrongly kept away from the use of the money claimed and it ought to be compensated for it. Not to be compensated, the winning party would be deprived of full justice. Incomplete justice in the circumstance before us would simply be grossly unfair and encourages 77 recalcitrant paymaster to remain delinquent.” [emphasis added; see too, SQA Builders Sdn Bhd v Luxor YRM Sdn Bhd and another suit [2018] 10 MLJ 759 and ACFM Engineering & Construction Sdn Bhd (supra)]. [95] In view of the line of cases on point, with the above pronouncement being one of them, and the empowering provision of section 25(o) CIPAA, I am unable to fathom how STD can now contend that the learned Adjudicator had acted in excess of his jurisdiction by allowing Jeks’s claim for late payment interest. [96] As for STD’s arguments regarding the absence of evidence to support Jeks’s claim, and knowing that one of the grounds put forth by STD in the Stay Application concerns the very same issue, albeit in the form of calculation error, it is suffice then for me to say that insufficiency of evidence and mathematical mistakes in relation to the Adjudicator’s assessment of late payment interest are matters which go to the merit of the said Decision. It is trite that in this proceedings, the Court does not operate as an appeal court which can freely delve 78 into the merits of the Adjudicator’s decision. STD’s recourse would have to be in arbitration or litigation. The Court in SQA Builders Sdn Bhd (supra at p 775) held that: “[47] Looking at the big picture, that is at most an error in calculation and not so much a breach of natural justice. [48] This is not so much a case where the adjudicator had gone on a frolic of her own but that in her anxiety to get the calculation precisely correct, she had forgotten for a moment that the claimant had only claim interest until 6 June 2016. Moreover the claimant had pleaded for interest at any rate and for such period that the adjudicator may determine at para 25 of its adjudication claim, thus giving a broad discretion to the adjudicator where the calculation of interest is concerned. 79 [49] It is at the end of the day an error in calculation of interest and not a material one that justifies the setting aside of the whole of the adjudication decision. It is an error that can be corrected in arbitration or litigation. It does not affect the substance of the decision.” (emphasis added). [97] Based on all the foregoing reasons, it is my considered opinion that the matters raised by STD do not justify a setting aside of the Adjudication Decision under section 15(b) and (d) CIPAA as prayed.

(C) STD’s application to stay the said Decision vide Enclosure 19 in OS No. 13 - Preliminary objection [98] First and foremost, STD raised a similar preliminary objection on the use of Jeks’s AIR No. 3 affirmed on 23.4.2019 (Enclosure 34) as it 80 did in respect of Enclosure 33. The authorities cited by STD in support of this challenge are also essentially similar. [99] The reasons given by STD are that –

the law does not allow the AIR to be used after the submissions have been filed;

the AIR was filed without leave of the Court;

the AIR was served on the day that the parties were directed to file and exchange their written submissions, namely on 24.4.2019;

the AIR adduces new evidence in the form of Jeks’s audited financial report for 2017 and LoA dated 16.10.2019 and 28.8.2018 (‘new evidence’); 81

STD had no opportunity to reply and/or address the new evidence by way of affidavit;

the new evidence is relied on by Jeks in its submissions; and

STD was deprived of the right of last reply. [100] I had duly considered STD’s preliminary objection and was inclined to agree with the reasoning that Jeks should not be allowed to rely on Enclosure 34. STD’s preliminary objection was accordingly allowed. - The parties’ submissions [101] Firstly, Dato’ Emran Arifin argued that the learned Adjudicator made clear computational errors in respect of the following claims as extracted from the Written Submissions: 82

Variation claim no 016 (late payment interest) 301,216.12

Variation claim no 001 (omissions) 101,091.97

Backcharges 205,000.00

Progress claim no 11 1,299,250.00

GST 183,456.53

Interest & financing costs To be determined Total 2,090,014.62 According to STD, the correct adjudicated sum should be RM2,379,486.23. [102] The discussion on Item 1 regarding late payment interest has been set out in Part B of this judgment. Item 6 on interest and financing costs is consequential to the findings on the other items which STD submits should be adjusted accordingly if the Court leans in favor of STD. This leaves Items 2, 3, 4 and 5 for determination. 83

Variation claim no 001 (omissions) [103] STD alleged that the learned Adjudicator failed to take into account the agreement between the parties on the quantum of variation no 001 as evidenced from the e-mail correspondence between the parties (exhibit “A-14” at pp 2172 – 2184 in STD’s AIS, Enclosure 8). [104] On the other hand, Jeks takes the position that there was no agreement between the parties for the sum of RM953,050.21 or RM960,294.55 to be omitted. Only the sum of RM859,202.58 has been certified as omission and as such the learned Adjudicator did not err in his findings. In any event, Jeks repeated its submission that there is no prejudice to STD since Table 7: Revised Variation Order Claim Summary in paragraph 85.18 of the said Decision shows that the total variation allowed by the learned Adjudicator is RM204,698.94 instead of RM2,178,761.14 as claimed by Jeks. [105] The analysis and findings by the learned Adjudicator on the issue of Omissions are as per the following paragraphs: 84 “85.9 Omissions: The Claimant clarified that it is not disputing the omissions of MYR859,202.58 and the emails referred to by the Respondent are not related to erroneous figures but to the subject of omissions. Thus after taking into account this omission there is a VO claim of MYR2,178,761.75, it is as shown in the Variation Order Claim Summary as certified by the Respondent. However the Respondent contended that this figure should be MYR960,294.55 or MYR953,050.21 and MYR859,202.58.

85.10 I note that the Parties have not submitted items if any in dispute for additions & omissions, but are disputing the net total sum for the computations. In the Respondent’s submission referring to RBD Tab-33 for March 2015 to 21 April 2015 Certification, it shows “Omissions Scope of Works=859,202.58” which is the same as the Claimant has agreed. 85

85.11 Having considered the documentary evidence presented, and submissions by the Parties, I find that the figure of MYR 859,202.58 is a common ground between the Parties. I am not convinced by the Respondent’s contention that the total sum for omission should be MYR953,050.21 or MYR960,294.55. The Respondent has not provided any logical explanation for the difference and also did not explain the difference between its own two sets of documents, i.e. Certificate of March 2015 to 21 April 2015 and the computations in RBD Tab-34.” (emphasis added).

(ii) Backcharges [106] STD similarly claimed that the learned Adjudicator failed to address his mind to Jeks’s admission on the quantum of backcharges which can be seen from Jeks draft final account in the same exhibit “A-14” at pp 4644 – 4647 in STD’s AIS (Enclosure 15). 86 [107] Jeks denied that there is an agreement between the parties to backcharge the sum of RM320,000.00. According to Jeks, the document relied by STD is a “without prejudice” document and thus, it is wrong for STD to place reliance on it. [108] Nevertheless, the document was considered by the learned Adjudicator and he was not persuaded that there was such an agreement when he said: “86. The Claimant submitted that the Backcharges applied in the PPC No. 11 as MYR(115,000.00). The Respondent contended that the Backcharges previously certified was MYR(245,236.80) and referred to its certification. The item 4.2 marked as Backcharges/Debit Notes in IPC No. 9 at Tab-33 of the RBD shows the sum of MYR(185,624.90).

86.1 The Respondent contended that the Claimant has not proved that the Respondent’s certification is wrong. 87 The Respondent submitted the details of the backcharges for the sum of MYR(435,888.98) with

86.2 It is noted from the Claimant’s Summary of Backcharges/Debit Notes that the Parties had not agreed on the final sum, as the column for the Claimant is showing MYR(115,000.00) and the column for the Respondent is showing MYR(311,630.50) excluding GST.

86.3 The Claimant contended that there are some items which are being deducted by the Respondent without supporting documents and there is no evidence that the Respondent has incurred the sum of

86.4 I noted that the sums for Backcharges as submitted and relied upon by the Respondent are 88 inconsistent between IPC No. 9, Schedule-7 of the CBD at Page 108 and Tab-60 of the RBD. The Parties did not elaborate on the itemised backcharges and their respective contentions. I have reviewed the summary of backcharges presented by the Claimant and noted that the Parties have agreed for most of the claims except on the labour related claim. I have also reviewed the documents referred by the Respondent under Tab-60 of the RBD, which is a collection of invoices and the summary sheet. The Respondent further submitted that the Claimant had agreed to the sum of MYR320,000.00. I am not persuaded by the submissions of the Respondent that the Backcharges should be as contended by the Respondent without providing proper evidence and itemised justifications with a proof of agreement between the Parties, if any. 89

86.5 I accept the Claimant's submissions and the reasons given with each item of the Backcharges, though briefly. Therefore having considered the evidence before me and the submissions by the Parties and the reasons given above, I find and decide that the Backcharges/Debit Notes amount under Item (d)(1) shall be the sum of MYR(115,000.00) as presented by the Claimant.” (emphasis added).

(iii) Progress Claim No. 11 & deduction for liquidated ascertained damages (‘LAD’) [109] On the issue as to whether STD’s claim for LAD can be applied as a set-off, STD out rightly contended that the learned Adjudicator came to a wrong conclusion. To STD, the sum of RM1,299,250.00, including RM2,250.00 excess deduction, being LAD due and payable by Jeks had not been deducted in the amounts due to STD. STD prepared the calculations in the following tabular form on the 90 assumption that the quantum of the variation orders and backcharges are not adjusted to illustrate its point: Description Adjudicated Amount Main Contract 25,940,000.00 Variation Orders (204,698.94) Backcharges (115,000.00) Waiver of Performance Bond (9,727.50) Revised contract sum after deduction 25,610,573.56 Total payment made to JEKS (21,463,068.23) Gross Amount Due to Jeks 4,147,505.33 GST (6%) on the outstanding sum of claim 11 183,465.53 Adjusted LAD over-deduction from IPC 9 2,250.00 Total Adjudicated Sum 4,333,220.86 LAD Deduction (1,297,000.000) Adjusted LAD over-deduction from IPC 9 (2,250) Net Amount Due to Jeks under the contract 3,033,970.86 91 [110] Jeks contended that STD’s “List of Payment”, as referred to earlier in my judgment, supports Jeks’s account of the matter i.e. that the sum of RM1,297,000.00 has been deducted from the payments made to Jeks. Interim Payment Certificate (‘IPC’) No. 9 (exhibit “A-14” at p 851 in STD’s AIS, Enclosure 4) also shows the same. [111] The learned Adjudicator provided yet another detailed explanation complete with four tables to justify his conclusion that LAD of RM1,297,000.00 had been deducted in IPC No. 9 and should not be deducted again in Progress Claim No. 11 as evinced below: “82. The Respondent has made submissions on the right to impose, the method of computation of LAD and provided the computations of LAD in the amount of MYR1,297,000.00.

82.1 The Claimant submitted that the Respondent has already deducted the LAD for the sum of 1,299,250.00 from the payment due to the Claimant 92 under Item 8 of IPC No. 9. However the Respondent submitted that LAD was not deducted but only shown on the IPC No.9 that it was the intention of the Respondent to deduct.

82.2 The Respondent contended that the Claimant has not provided any proof of the deduction. The payments under IPC No. 9 were superseded by previous claims and provided the List of Payments and Payment Vouchers. The Claimant submitted that there were no further certificates issued after IPC No. 9.

82.3 The Claimant contended that after the application of LAD and payment received towards IPC No. 9 there is an outstanding amount of MYR505,498.55 which is not a double claim as contended by the Respondent.

82.4 I have reviewed the IPC No. 9 as submitted and find that LAD has been deducted. The computation 93 of the List of Payments provided by the Respondent shows the payment for the sum of MYR21,463,068.23 as reproduced for convenience in Table-4. The Claimant’s Claim for outstanding sum under IPC No. 9 is reproduced hereunder in Table- 5(a) and after inserting the actual paid amount by the Respondent from Table-4 (MYR21,463,068.23) is shown in Table-5(b). This has taken account of the Respondent’s submission that the Claimant has not accounted for the payments after IPC No. 9. This shows an outstanding sum payable to the Claimant under IPC No. 9 as MYR455,498.55 instead of MYR505,498.55 claimed.

82.5 The net outstanding payment under IPC No. 9 is based on the deduction of LAD sum of MYR1,299,250.00 instead of MYR1,297,000.00 claimed by the Respondent, (which is 5% of the Contract Sum pursuant to Clause 9 of the LOA). 94

82.6 Given that these details are correct as evident from the records before me, then it implies that the Respondent had applied an excess of MYR2,250/- (1,299,250 - 1,297,000 = 2,250) in IPC No. 9 towards set off for LAD. By adding back the excess deduction of MYR2,250/- to the outstanding amount due to the Claimant, the corrected amount shall be MYR457,748.55.

82.7 I find that the Respondent's statement that LAD of MYR1,297,000.00 has not been deducted is incorrect. The contended deduction again, will amount to double deduction and is not allowed. Therefore having considered the submissions of the Parties and evidence presented, I find and hold that the Respondent is entitled to apply the set off for MYR1,297,000.00 towards LAD under 95 this Contract, and this set off has already been applied under IPC No.9.” (emphasis added).

(iv) Goods and Services Tax (‘GST’) [112] As regards GST, STD alleged that the learned Adjudicator wrongfully awarded GST to Jeks in the sum of RM183,456.53 (“GST sum”) when Jeks failed to demonstrate that it is GST registered pursuant to sections 19, 20 and 21 of the Goods and Services Tax Act 2014 [Act 762]. Furthermore, there were no invoices or documents showing that GST is payable. [113] Jeks countered STD’s submissions by stating that during the course of the adjudication proceedings, STD never once raised any issue on GST and therefore the present contentions are nothing but a mere afterthought. 96

Special Circumstances [114] Additionally, it is STD’s contention that there are special circumstances that warrant a stay since Jeks’s financial position is precarious and Jeks would be unable to pay STD in the event that STD succeeds to secure an award in its favor in the arbitrations. Reference was made to Niko Bioenergy Sdn Bhd v. Rh Balingian Palm Oil MilL Sdn Bhd [2018] 1 LNS 1621; Brodyn Pty Ltd v Davenport [2004] NSWCA 394; and WY Steel Construction Pte Ltd v Osko Pte Ltd [2013] SGCA 32 to support this ground. The basis for STD’s contention that Jeks’s financial position is precarious is that the exhibits show, and as Jeks have admitted, that Jeks –

is entirely own by a foreign entity, Jeks Holdings Pte Ltd;

has 10 unsatisfied bank charges, the earliest created on 13.8.2009; 97

has made a loss after tax of RM183,107.00 in its last recorded financial year, 2016;

has not submitted its financial statements to the Companies Commission for the year 2017 and 2018; and

has no new projects after May 2018. STD emphasised that its claim in the arbitration, consisting primarily of LAD for delay and costs of rectification amounting to a total which is close to RM50 million, significantly outweighs Jeks’s claim. [115] Moreover, Jeks has served STD with a statutory demand pursuant to section 466 of the Companies Act 2016 [Act 777] (‘CA 2016’) and referring to the judgment in Cathay Theatres Pte Ltd v LKM Investment Holdings Pte Ltd [2000] 1 SLR(R) 15, an eventual winding up of STD would effectively render the appeal in this case nugatory. This, says STD, is an additional reason to justify the Stay Application. 98 [116] It is not uncommon in construction cases for each party to exhibit the Financial Statements which have been lodged by the other party in the quest to prove the precarious financial standing of the opponent. This is one of such cases. In paragraph 13 of Jeks’s AIR (Enclosure 23), it was averred that the company search on STD (exhibit “A-1”) revealed that for the financial year ending 30.6.2017, STD suffered losses in the sum of RM1,809,993.00 (after tax). STD’s Public Bank Statement of Account dated 30.11.2018, 31.12.2018 and 31.1.2019 were also exhibited whereby the closing balance as at 31.1.2019 is RM273,838.79. [117] Based on the foregoing, Jeks alleged that the Stay Application is nothing more than an attempt to delay making payment of the Adjudicated Sum and costs to Jeks. There are no special circumstances to warrant a stay and there is no evidence that Jeks is unable to pay if STD succeeds in the arbitration. [118] STD’s in its AIR (Enclosure 24) did not deny that it was having a rough time with the business but nevertheless, it affirmed that it is still 99 very much a going concern as evidenced by the number of transactions reflected in the bank statements from November 2018 to January 2019. In addition, exhibit “A-7”, which is the Return Of Allotment Of Shares under section 78 CA 2016, shows that STD has increased its share capital to RM1,750,000.00 on 15.2.2019 as a measure to preserve the business. - Findings by the Court [119] The Stay Application is made pursuant to section 16(1)(a) and/or (b) CIPAA which reads: “(1) A party may apply to the High Court for a stay of an adjudication decision in the following circumstances:

an application to set aside the adjudication decision under section 15 has been made; or 100

the subject matter of the adjudication decision is pending final determination by arbitration or the court.”. [120] The fact that STD has fulfilled the pre-conditions in the above quoted paragraphs in section 16 is uncontroverted. Nevertheless, the matter does not end there as STD has to satisfy the test as expounded by the Federal Court in View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22 to warrant its application for a stay of the said Decision. Zulkefli PCA in delivering the judgment of the Court held at pp 48 - 49 that – “[82] We are in agreement with the contention of the appellant that a more liberal reading of s 16 of the CIPAA would allow some degree of flexibility to the courts to stay the award where there are clear errors, or to meet the justice of the individual case. It is accepted that a stay of the award ought not be given readily and caution must be exercised when doing so. However to restrict the application 101 of section 16 of CIPAA in the manner proposed by the High Court, and the Court of Appeal, would be to strip it of any utility.”. [121] An analysis of the Federal Court decision is provided by the learned authors Lam Wai Loon and Ivan FY Loo in their book Construction Adjudication In Malaysia, Second Edition, Sweet & Maxwell 2018 at p 460 as follows: “[16.007] The Federal Court in View Esteem declined to adopt the restrictive test that has been applied in the United Kingdom, Australia and Singapore. The Federal Court explained that under the adjudication legislative scheme in these other jurisdictions, a stay application is made only when the other avenues for review of and challenge to the adjudication decision have been exhausted, and therefore, it makes sense that applications for stay in other jurisdictions are rarely granted. However, the Federal Court said that the CIPA Act 2012 does not have these features, and as such, 102 the judicial decisions on the principles for stay pronounced by the courts in these other jurisdictions do not apply to the adjudication regime under the CIPA Act 2012. It was also held that such a stringent test is not justified in the CIPA Act 2012 context because section 16 does not contain such limiting requirement or intent. [16.008] The Federal Court held that section 16 of the CIPA Act 2012 allows some degree of flexibility to the courts to stay an adjudication decision “where there are clear errors, or to meet the justice of the individual case”. The financial capacity of the winner to repay is one, but not the only factor which the courts will consider in deciding whether or not a stay ought to be granted. [16.009] The Federal Court treated section 16 of the CIPA Act 2012 as “one of the safeguards to a likely wrongful adjudication decision and which empowers the court to find a suitable middle ground in cases where there has been 103 clear and unequivocal errors”. However, although a more liberal approach has been adopted, it is important to note that the Federal Court also accepted that “a stay of the [adjudication decision] ought not be given readily and caution must be exercised when doing so.” It is therefore submitted that not every error in an adjudication decision would justify a stay. The error must be one that is clear and unequivocal, and which substantially affects the outcome of the decision, and is not peripheral or minor in nature, as in the case of View Esteem. … ” (emphasis added). [122] In essence, STD submitted that the Adjudicator made clear errors of law in arriving at the said Decision on grounds similar to those advanced in respect of the Setting Aside Application. Since these grounds have been canvassed in Part (B) above, for purposes of the Stay Application, I will address the other issues raised by STD in its attempt to convince the Court to grant a full stay or alternatively, a conditional stay as ordered in Niko Bioenergy Sdn Bhd v. Rh 104 Balingian Palm Oil MilL Sdn Bhd [2018] 1 LNS 1621 and Euroland & Developments Sdn Bhd v. Tack Yap Construction (M) Sdn Bhd [2018] 1 LNS 1603. [123] STD’s averments that there are computational errors can be dealt with fairly quickly. The lengthy extracts from the said Decision as outlined above are testament of the fact that the learned Adjudicator had not only considered the arguments by both parties, but reasons were given as to why he ultimately chose one view over the other. I am unable to detect any clear and unequivocal errors in respect of each item and its corresponding amount as contended by STD. [124] As regards the non-lodgment of the Financial Statements for the year 2017, Jeks offered the following explanation in its AIR No. 2 (Enclosure 26): “13. … I state that the Defendant has submitted its financial statements for the year 2016. In respect of the year 2017, the Defendant is unable to submit the same as 105 the auditors are enquiring on the arbitration proceedings and the adjudication proceedings that are on-going between the Plaintiff and the Defendant. I state that a draft report and financial statements has been prepared and is pending finalization. I further state that Defendant is a company established since the year 1994 and has been actively carrying out projects since then.”. [125] Copies of the summary of the relevant pages from Jeks’s draft report and financial statement as approved by Jeks’s auditor, Jeks’s company profile and the list of on-going projects being carried out by Jeks was annexed as exhibit “A-1”. However, these were challenged by STD on various grounds including that the draft report and financial statement are incomplete, not final, and not signed or verified by Jeks’s auditors; no evidence is produced as proof that Jeks will submit the draft report and financial statement for the year 2017 and that Jeks is preparing the same for the year 2018; the validity of the list of Jeks’s on-going projects is questionable since 106 there are no commencement and completion dates, and it differs from the list on Jeks’s website where the last project completed was in May 2018. As for the reason given by Jeks for the non-submission of the Financial Statements for the years 2017 and 2018, STD states that any enquiries by Jeks’s auditors about the on-going arbitration and adjudication proceedings are wholly unrelated to Jeks’s ability and obligation to submit the same (refer paragraphs 5 to 8 and exhibit “A-8” in STD’s AIR (2), Enclosure 28). [126] This Court takes the view that there are merits to the above mentioned challenges in so far as they relate to Jeks’s draft report and financial statement. In the circumstances, the Court had given consideration only to the company search on Jeks as per exhibit “A- 6” in Enclosure 24 and the lists of on-going projects by Jeks as shown in exhibits “A-1” in Enclosure 26 and “A-8” in Enclosure 28. The said exhibit “A-8” has a list of 9 projects undertaken by Jeks for the completion year ranging from October 2016 to May 2018. The said exhibit “A-1” has a list of 15 projects as at 25.3.2019 with the project numbers, description, scope of work, client and contract sum. 107 Among the projects are a hospital, public schools, colleges, a university, training institute and centre, and the Office of the State Secretary of Perlis. Judging by the details set out in the list in the said exhibit “A-1”, I have no valid reason to doubt that these are indeed Jek’s current projects. The details in the said exhibits “A-8” and “A- 1” for on-going projects would naturally differ since they relate to different time periods and the information in the website is only until May 2018. [127] In light of the 15 current projects, I find it difficult to accept STD’s contention that there is a risk of Jeks absconding and/or winding up its company after receiving the Adjudication Sum from STD. There is just insufficient evidence for the Court to conclude that this would be a probable event. In fact, it is STD that is under threat of being wound up, a consequence which STD can avoid by paying the Adjudication Sum to Jeks. In addition, the list of projects is evidence that Jeks is a going-concern, very much in the same way that STD would have this Court to believe by way of STD’s bank statements and Return Of Allotment Of Shares. 108 [128] In the upshot, I am of the considered view that there is no clear or unequivocal errors made by the Adjudicator who had provided reasons for his findings and conclusions based on the evidence that was submitted before him. [129] I am further unconvinced that a stay, whether conditional or otherwise, is justified to meet the justice of this case. In fact, it would be an injustice to Jeks to keep it out of the Adjudicated Sum which is for work done and completed by Jeks since 2015. Amidst the multi-faceted submissions by the parties, this Court has not lost sight of the purpose and objective of CIPAA, namely to alleviate payment problems that prevail and stifle cash flow in the construction industry by providing a speedy mechanism for settling payment issues in construction contracts on a provisional interim basis (see UDA Holdings Bhd v Bisraya Construction Sdn Bhd & Anor and another case [2015] 11 MLJ 499). I therefore dismissed the Stay Application with cost. 109

(D) Jeks’ application to enforce the said Decision vide OS 38 (Enclosure 1) [130] This Court is empowered to order that the said Decision be enforced as if it is a judgment or order of the High Court by virtue of section 28 CIPAA which states: “Enforcement of adjudication decision as judgment

28.

A party may enforce an adjudication decision by applying to the High Court for an order to enforce the adjudication decision as if it is a judgment or order of the High Court.

The High Court may make an order in respect of the adjudication decision either wholly or partially and may make an order in respect of interest on the adjudicated amount payable. 110

The order made under subsection (2) may be executed in accordance with the rules on execution of the orders or judgment of the High Court.”. [131] In so far as the Setting Aside Application and Enforcement Application are concerned, it has long been recognised that one is the flip side of the other (see Tidalmarine Engineering Sdn Bhd v. Conlay Construction Sdn Bhd & Another Case [2018] 2 CLJ 376]. If the Court allows the Setting Aside Application, then the Enforcement Application would be dismissed and vice versa. [132] Flowing from the foregoing analysis of the issues in the Setting Aside Application and Stay Application, STD has failed to demonstrate that the grounds it relied upon to set aside the said Decision falls within section 15 CIPAA and that a stay of the said Decision under section 16 CIPAA is warranted. The binding effect of the said Decision on the parties must thus be upheld by the Court. 111 [133] This therefore leads to the inevitable conclusion that the Adjudication Decision is a fit and proper decision to be enforced as if it is an order or judgment of this Court pursuant to section 28 CIPAA. Conclusion [134] Based on all of the above considerations, the Court accordingly allowed Jeks’s Enforcement Application with cost of RM10,000.00, subject to allocator, and dismissed STD’s Setting Aside Application and Stay Application with costs of RM12,000.00 and RM10,000.00, respectively, subject to allocator. Dated: 31 December 2019 (ALIZA SULAIMAN) Judicial Commissioner Construction Court 2 High Court Kuala Lumpur 112 Counsels/Solicitors: Originating Summons No. WA-24C-13-01/2019 For the Plaintiff: Dato’ Mohd Arief Emran bin Arifin (Janice Tay & Ooi Chih Wen with him) Messrs. Wong & Partners Advocates & Solicitors Level 21, The Gardens South Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur For the Defendant: Sanjay Mohanasundram (Wong Li-Wei with him) Messrs. Sanjay Mohan Advocates & Solicitors Unit 5.01, Level 5 WORK@Clearwater Jalan Changkat Semantan 50490 Kuala Lumpur Originating Summons No. WA-24C-38-03/2019 For the Applicant: Sanjay Mohanasundram (Wong Li-Wei with him) Messrs. Sanjay Mohan Advocates & Solicitors Unit 5.01, Level 5 WORK@Clearwater Jalan Changkat Semantan 50490 Kuala Lumpur 113 For the Respondent: Dato’ Mohd Arief Emran bin Arifin (Janice Tay & Ooi Chih Wen with him) Messrs. Wong & Partners Advocates & Solicitors Level 21, The Gardens South Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur